Some States Say Teamwork Is Key
     Kansas began its crusade against questionable online drug vendors about a year ago, with a lawsuit against Lifestyle USA. Since then, Attorney General Carla J. Stovall has filed five more consumer protection lawsuits against seven companies. The office had conducted an investigation and found that they could order many prescription-only drugs online from doctors and pharmacists who are not licensed in the state, four of whom were operating under fictitious names. Stovall also expressed concern that many vendors supplied minors and those who had specified conflicting medical conditions with the medication. Attorneys general in Michigan, Illinois and Missouri have waged similar lawsuits against different Internet pharmaceutical vendors and have created an informal task force so each office can target their own set of drug companies so that more of them are hit with suits.
     "Part of the grounds for our suit was that these companies were not licensed," said Lori Corral, a spokeswoman for Illinois Attorney General Jim Ryan. "I think licensing is extremely important, and it's the best way for the states to ensure that these companies are looking out for the best interests of…consumers."
     In her push to stop the drug sales into Kansas, Stovall has offered legislation to the state Senate, introduced by the Judiciary Committee. The bill requires all online drug vendors to include a disclosure on their sites notifying customers the states in which its doctors are licensed as well as disclosures in commercial e-mail, and also would abolish the waivers many sites post claiming to absolve themselves from any liability in medical malpractice suits. Stovall's office questions the legality of such waivers and their jurisdiction in Kansas, said Assistant Attorney General Fran Brunner. "We don't think those are affective waivers, but we think consumers will think they are," Brunner said.

Civil Libbers Decry Additional Legislation
     But a legislative approach like Kansas' doesn't sit well with libertarians at the Cato Institute, who have been speaking out against such sting operations and litigation by attorneys general. They argue that no new legislation is needed to combat these companies, all of whom are breaking current fraud or consumer protection laws already. With existing programs that award seals of approval to sites that meet certain criteria, and the growing amount of health-related information consumers can access online, the government should just step aside, said Ed Hudgins, Cato's director of regulatory studies. "I would say to these attorneys general 'mind your own damned business,' underlining that and putting it in big red letters," he said. "It's a matter of whose life is it anyway? I think what you're going to see, absent government intervention, is that reputable sites will develop their own codes and guidelines and procedures and will advertise themselves as such."
     Programs like that are already underway. The National Association of Boards of Pharmacy developed its Verified Internet Pharmacy Practice Sites (VIPPS) Program in February. Participating companies meet a 17-point checklist of criteria, document their licensure in state boards of pharmacy and undergo an onsite review. In return, the Internet drugstores can display the VIPPS seal of approval — a distinction that so far has only been awarded to four companies.
     Drugstore.com is one of those pharmacies, and as Director of Government and Public Relations Debby Fry Wilson explained, the industry has backed the program for quality control. "It's an important educational tool for consumers and a resource for quality assurance," Wilson said, adding that with advertising and education, the company has "been effective at communicating what we offer customers and have been able to separate ourselves from the unscrupulous players."

Is Self-regulation Sufficient?
     But the federal government is now questioning whether such industry programs are sufficient. Rep. Ron Klink, R-PA, introduced legislation in August pushing for more stringent guidelines for online drug sales. The Internet Pharmacy Consumer Protection Act would require online pharmacies to list the name of their primary practitioner, provide a phone number and address and document the states in which it is licensed to practice. In late December, President Clinton backed federal regulation of the industry, and wants Congress to give the Food and Drug Administration the authority to deny online pharmacies from doing business, with penalties for selling drugs without appropriate prescriptions.
     Such attention to the growing problem has been lauded by attorneys general, but many cautioned that proposals that allow the federal government to take over an industry that traditionally has been regulated by the states. Kansas' Brunner noted that Klink's bill allows states to remain the primary enforcement authorities as long as their limits on the industry are as least as restrictive the federal legislation, which the proposed state law would be. In that case, she said, the attorney general supports it. As for the White House proposal, there are still questions about jurisdiction and the ultimate rights of states. "We're happy they're jumping on the bandwagon, but we don't want to be limited in what we're doing by the federal government," Brunner said.
     And some industry players question whether new laws will stop those who already are operating their businesses illegally. "That's the flaw in the proposal," said Drugstore.com's Wilson. "They're not complying with the laws now, so it's hard to imagine a scenario where they'd comply with new laws." Drugstore.com has been working with administration officials to iron out plans, and the other prominent online drugstores have readied themselves for a lobbying campaign against federal legislation.
     "States have been regulating (pharmacies) for years, and it would seem that it behooves us to allow the states to have a crack at what they traditionally do," said PlanetRx's Naythons. "I'm not sure what another layer of regulation would do, although I applaud the interest."
- by Stephanie Lash